We study the relationship between sustainable and average cost prices in the multiproduct case. It is shown that for the case where costs are separable only average cost prices can be sustainable even if demands are interdependent. As for the non-separable cost case the notion of average cost prices is axiomatically defined as an extension of the average cost concept of the single product case. We then use this extension to derive necessary as well as sufficient conditions for the extended average cost prices to be sustainable.
|Number of pages||18|
|Journal||International Journal of Industrial Organization|
|State||Published - Jun 1986|